China will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced, its finance ministry said on Wednesday, firing the latest salvo in a global trade war sparked by US President Donald Trump.

Trump’s “reciprocal” tariffs on dozens of countries took effect earlier on Wednesday, including massive 104% duties on Chinese goods. The European Union is also preparing its own retaliatory measures for later on Wednesday.

Trump’s punishing tariffs - which he says aim to end US trade deficits with many countries - have upended a global trading order in place for decades, raising fears of recession and wiping trillions of dollars off the market value of major firms.

Global markets took a pummelling on Wednesday as Trump’s eye-watering 104% tariffs on China came into effect, and a savage selloff in US bonds sparked fears that foreign funds were fleeing US assets.

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US Treasury Secretary Scott Bessent, in an interview with Fox Business Network, said China’s new tariffs were unfortunate.

“They have the most imbalanced economy in the history of the modern world, and I can tell you that this escalation is a loser for them,” he said.

This week has already brought crisis-era volatility to markets, wiping trillions of dollars off the value of stocks and hammering commodities and emerging markets.

Shares of big US banks fell pre-market, extending tariffs-induced losses after China announced its 84% tariffs on US goods. Oil prices extended their four-year lows.

“The US and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down,” said Ting Lu, chief China economist at Nomura.

Trump had nearly doubled duties on Chinese imports, which had been set at 54% last week, in response to previous counter-tariffs from Beijing.

The White House had no immediate comment on China’s latest retaliatory move.

Earlier on Wednesday, China called its trade surplus with the United States an inevitability and warned it had the “determination and means” to continue the fight if Trump kept hitting Chinese goods.

China’s currency has faced heavy downward pressure, with the offshore yuan at record lows due to the tariffs. But sources told Reuters the central bank has asked major state-owned banks to reduce U.S. dollar purchases and would not allow sharp yuan declines.

Meanwhile, China told the World Trade Organization that the US tariffs threatened to further destabilise global trade.

“The situation has dangerously escalated. As one of the affected members, China expressed grave concern and firm opposition to this reckless move,” China said in a statement to the Geneva-based WTO on Wednesday that was sent to Reuters by the Chinese mission to the WTO.